Angry Tories unveil raid documents

Elections Canada alleges the Conservative party violated federal election law by funnelling money in and out of local candidates' campaigns so the national party could spend $1.1 million above its legal limit on media advertising in the last election.

OTTAWA–Elections Canada alleges the Conservative party violated federal election law by funnelling money in and out of local candidates' campaigns so the national party could spend $1.1 million above its legal limit on media advertising in the last election.

In a sworn affidavit, investigators also say the party and its official agents later deliberately filed misleading documents to recoup rebates for expenses that were never in fact incurred by local candidates.

The allegations are set out in a 68-page sworn affidavit by Ronald Lamothe, assistant chief investigator in the office of the Commissioner of Canada Elections. The document also claims last week's extraordinary search of the party's national headquarters by Elections Canada and the RCMP was justified to obtain evidence.

A Toronto court was to have released copies of the search warrant and related documents today.

But yesterday, outraged over the unprecedented search on party headquarters, Conservative officials decided to put their own spin on the raid and released nearly 650 pages of search warrant documents.

Saying they wanted to avoid a "media circus," three party officials also took the unusual step of briefing a "limited number" of invited reporters. But the attempt to frame the party message went awry when other journalists learned of the briefing. To avoid uninvited journalists, the Conservative officials switched hotels, cancelled a briefing, and left via a fire stairwell to avoid pursuit by television cameras.

The Conservatives insist they have done nothing wrong and say they were taken aback at the raid last week because they have complied with all requests to turn over documents.

But in the affidavit, Lamothe alleges the federal Conservatives embarked on a deliberate strategy to thwart election financing laws – and the party's spending limits – and to claim $700,000 in rebates for advertising expenses to which local candidates were not entitled.

Lamothe sought hard-copy and electronic copies of correspondence, emails, invoices, accounting records and other documents that would outline discussions between Conservative officials and its media production and buying agencies Retail Media, Yield or Yield Integrated, Republic Publicité + Design Inc.

Lamothe cited three potential offences under the Canada Elections Act.

The Conservative Party and its fundraising arm, the Conservative Fund Canada, are separately alleged to have knowingly spent more than the allowable national $18.2 million limit.

The third allegation comes under the obligation to file "true and complete reports." The allegation is that the party's official agent filed returns with Elections Canada "that it knew or ought reasonably to have known contained a materially false or misleading statement" on its expenses.

The range of penalties for exceeding the election expense limit for a party's chief agent is a $1,000 fine, three months imprisonment or both. A registered party is liable to a $25,000 fine.

The documents released yesterday include candidates' returns, emails and correspondence the agency had obtained between party officials, candidates, and its advertising agency.

In one email, Newfoundland Tory official Brian Hudson wrote that local campaigns could use that rebate "in whatever way your team desires (pay off election debt or use towards credit)."

The people acting as the "official agents" for the Tory candidates were given precise, step-by-step instructions in how the transfer would work.

And in every case, Conservative head office first demanded that the local campaign provide bank wire instructions to ensure head office would get its money back.

"The transfer of funds to, and the withdrawal of similar amounts from, participating campaign bank accounts was entirely under the control and direction of the Conservative Fund Canada," the document states.

As a result, the Conservative Party – not the candidates – was obligated by the law to report the spending, Elections Canada says.

The court filing sets out examples from across the country – British Columbia, Toronto and Quebec – where investigators found local candidates who had no knowledge of the advertising pitch or any dealings with Retail Media, the firm responsible for the ad purchases.

Even Retail Media had questions about the Conservative strategy.

"While our thinking is that this option would be legal, we are not certain of this beyond all reasonable doubt," wrote a company vice-president in one email obtained by Elections Canada.

The same allegations are also at the heart of the party's civil lawsuit with Elections Canada's finance and audit branch, which last year denied rebates to 65 local candidates across the country.

The sudden raid, the seizures, and the suggestion that the party deliberately skirted elections law have sparked a blood feud between the governing party and Elections Canada, an independent agency.

Dropping the moderate language about a "visit" from investigators, party officials yesterday said the RCMP and Elections Canada officials "stormed Conservative party headquarters."

Investigators lined 16 or 18 people up along a hallway, one party official said, "like we were going to shoot back? I mean they had ... unfettered access to every single thing in Conservative party headquarters. They removed 17 boxes of material specific to our lawsuit, all the background stuff."

"They took away our tactics and our strategy" for the court case, said the official.

He also said the raid went well beyond the scope of the warrant, with investigators gathering information that had nothing to do with the issue.

"What does my computer and what's on there about the next campaign strategy, the next platform, the next ad campaign, and everything else, what the hell has that got to do with Elections Canada?" another official said.

"This is absolutely over the top."

Much of the seized material is likely to be the subject of legal arguments over whether it is subject to solicitor-client privilege.

Lamothe's affidavit asked for the documents to be sealed by the court, saying the investigation would be compromised if its information was made public, and witnesses who were already unco-operative would be further "chilled" from assisting.

He said investigators had interviewed 14 candidates or official agents, and had tried but failed to interview additional witnesses.

He said 16 of 18 individuals "declined to be interviewed and stated to investigators that they have been advised by counsel to the Conservative Party of Canada that they should not speak with Elections Canada investigators without the involvement of counsel to the Conservative Party of Canada," citing the ongoing civil case.

One official said the party has never denied its campaigns are "centrally organized... that our national campaigns and our regional organizers were the drivers for this."

All ads contained the necessary local taglines, he said.

But some candidates who agreed to go in on buying advertising time "had second thoughts," and had to be told it was "too late" to later pull out. "It's all part of running a modern, integrated national campaign."

Conservative officials scoffed at suggestions extra spending by the national campaign might have made the difference in a dozen or so ridings and helped the party win the election.

"The fundamental question here is this: who has the right to determine how a party electorally advertises itself?" said one.

"I believe I have the right to determine that if I wanted to use Stephen Harper and the central message to advertise regionally, I should be allowed to do that ... "

But last night, Pat Martin, the NDP ethics critic, told The Canadian Press that "heads should roll" if the Tories are found to have broken the election rules.

"That $1 million frankly could have bought the election," said Martin. "That's a really big advertising buy in a very close, razor-thin difference in a federal election."

The Tory official said "this is not just about money or rebates."

If it was, he suggested, there were easier ways for the party to get $1.1 million than "out of the hide of Elections Canada."

With files from Bruce Campion-Smith

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